Forterra (LON:FORT) Issues Earnings Results

Key Points

• Resilient first-half results: Like-for-like revenue declined 9% to £169 million as volumes weakened, but adjusted EBITDA reached £27 million and margins improved to 16%. Management expects full-year performance to remain in line with market consensus.
• Demand remains challenging: Domestic brick dispatches fell 8%, while housing starts and repair, maintenance and improvement activity were affected by high interest rates, limited mortgage availability and weak consumer confidence. Second-half demand is expected to be broadly similar to the first half.
• Financial and strategic flexibility: Pricing actions and energy hedging are supporting margins, while net debt remained low at £74.5 million and the £20 million buyback is expected to finish in the second half. Growth projects including Desford, Omnia brick slips and a potential Aircrete replacement facility are progressing, though the latter has not received final investment approval.

Forterra (LON:FORT - Get Free Report) released its earnings results on Tuesday. The company reported GBX 4.10 earnings per share (EPS) for the quarter, Digital Look Earnings reports. Forterra had a return on equity of 7.33% and a net margin of 4.40%.

Here are the key takeaways from Forterra's conference call:

• Resilient first-half performance despite weak demand: Like-for-like revenue fell 9% to £169 million as volumes declined, while adjusted EBITDA was £27 million and the margin improved 70 basis points to 16%. Adjusted PBT declined 12.7% to £14.5 million, and management expects full-year performance to remain in line with market consensus.
• Market conditions remain challenging: Domestic brick dispatches fell 8%, NHBC housing starts excluding flats and apartments were down 9%, and RMI activity remained subdued amid higher interest rates, reduced mortgage availability and weak consumer confidence. Management expects second-half demand to be broadly consistent with the first half.
• Pricing and energy hedging are supporting margins: Forterra implemented low-single-digit brick price increases plus transport and energy surcharges, while approximately 80% of expected 2026 gas usage and 2027 coverage is secured at pre-conflict pricing. The company also has layered energy positions through 2030 and electricity price certainty from its solar operations through 2040.
• Capital discipline and shareholder returns remain priorities: Net debt was £74.5 million, keeping leverage below 1.5x, and the £20 million share buyback is expected to be completed in the second half. Forterra also extended its £170 million revolving credit facility to July 2030, with lower interest costs and a move from secured to unsecured borrowing.
• Strategic growth initiatives are progressing: Desford continues to ramp up, Omnia brick slips have secured initial projects and a growing pipeline, and Forterra is exploring a calcined-clay joint venture. The company is also evaluating a roughly £60–£65 million Aircrete replacement facility, partly funded by the potential £25 million sale of the Hams Hall site, although no final investment decision has been made.

Forterra Stock Performance

FORT opened at GBX 138.36 on Tuesday. The company has a quick ratio of 0.82, a current ratio of 1.46 and a debt-to-equity ratio of 34.75. Forterra has a 12-month low of GBX 126.40 and a 12-month high of GBX 215. The business has a 50 day moving average of GBX 135.36 and a 200-day moving average of GBX 158.36. The stock has a market cap of £283.77 million, a price-to-earnings ratio of 17.30, a PEG ratio of 0.30 and a beta of 0.73.

Insider Buying and Selling

In other Forterra news, insider Neil Ash purchased 17,500 shares of the company's stock in a transaction that occurred on Friday, June 12th. The shares were acquired at an average price of GBX 132 per share, for a total transaction of £23,100. Also, insider Nigel Lingwood purchased 25,000 shares of the business's stock in a transaction on Friday, June 12th. The shares were acquired at an average cost of GBX 133 per share, with a total value of £33,250. Insiders have purchased a total of 54,000 shares of company stock worth $7,164,500 over the last three months. 0.46% of the stock is owned by insiders.

Wall Street Analyst Weigh In

FORT has been the subject of several recent analyst reports. Berenberg Bank cut their price objective on Forterra from GBX 220 to GBX 170 and set a "hold" rating for the company in a report on Wednesday, May 20th. Jefferies Financial Group reaffirmed a "buy" rating and set a GBX 204 price target on shares of Forterra in a research report on Wednesday, May 20th. Deutsche Bank Aktiengesellschaft cut their price target on shares of Forterra from GBX 320 to GBX 250 and set a "buy" rating for the company in a research note on Wednesday, May 20th. Finally, Royal Bank Of Canada decreased their price objective on shares of Forterra from GBX 220 to GBX 195 and set an "outperform" rating for the company in a research report on Wednesday, May 20th. Four equities research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average target price of GBX 209.83.

About Forterra

Forterra is a leading UK manufacturer of essential clay and concrete building products, with a unique combination of strong market positions in clay bricks, concrete blocks and precast concrete flooring. Our heritage dates back many decades and the durability, longevity and inherent sustainability of our products is evident in the construction of buildings that last for generations; wherever you are in Britain, you won't be far from a building with a Forterra product within its fabric. Our clay brick business combines our extensive secure mineral reserves with modern and efficient high-volume manufacturing processes to produce large quantities of extruded and soft mud bricks, primarily for the new build housing market.

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